Pesky Little Details We All Need to Know About

When growing your money tree with a trading system there are a plethora of pesky little details that happen “under the bark,” “inside the root ball.” Most of the time you don’t have to furor your brow over them because the strategy, the code, handles it all.

However, there are times when you scratch your head and wonder “why in tarnation did that happen?”

Today we are going to talk about some of those head-scratchers.

1. What is a Trade-Through?

QiT uses a limit order to enter all positions.

We identify a candidate, according to the rules of the algorithm, then we throw our cast into the river and sit back with a can of Coors and let the fish take the bait.

At least 70% of the time, our limit orders don’t get filled because the fish were not biting. On to the next fish.

At least 70% of the time, our limit orders don’t get filled because the fish were not biting. On to the next fish.

However, there are times when our limit order is the daily low and we end up in that most reveredplace, “buying at daily lows.” These are the fish we hold up to have our buddies take our pictures with.

There isn’t a trader alive, or dead, who wouldn’t give up his first-born male child to buy at daily lows.

Unfortunately, not everyone will get filled at those daily lows. It will depend on liquidity and the broker you use. Some QiT members will be filled, some will get partial fills and some will not be filled at all.

What do we do?

As a service what do we do? We originally thought we wanted to be as fair as we could to all members so we implemented a rule that required everyone who got a fill at daily lows to exit the position the next morning bringing all members back in sync.

This seemed to be the fairest way to handle it

2. What is an nBar?

The nBar is the circuit breaker we use on a trade. It is the number of days a trade will be allowed to stay open before we exit. Each portfolio will have a different nBar stop based on the optimizations.

3. What is a Slot?

Each strategy allows a maximum number of positions and each position is allocated a slot.

Now what happens if there are more candidates that fit the startegy criteria than the algorithm will allow?

In this case, all trades that fit the strategy rules are sorted on their on their respective HV(100).

The trades with the highest HV get a slot.

This means we trade the more volatile stocks for research has shown us we want to be where the action is.

What happens when all Slots are filled?

Let’s say the algorithm’s rules are 10 positions maximum. The strategy will try to fill each slot. Let’s say 6 of those slots are already filled so it will try to open 4 more – this is very easy and straightforward.

But what about the slots that are filled today but have been signaled to exit tomorrow?

If the exit is a market at open, the slot will become available right away but a limit exit becomes a little trickier. There could be more than 10 open positions for part of the day, or until the limit exit is reached. This is not a problem with a margin account but it is with a Cash account.

The algorithm will recognize a cash account and not allow more than the maximum number of slots to be filled.

4. Tick Size Pilot Program

By now, most people who actively trade small-cap stocks have run into pricing for certain issues that reflect an increment of 5 cents. This is the result of the Oct. 3rd, 2017 implementation of a two-year plan called the “Tick Size Pilot Program (TSPP).”

This plan was initiated by the SEC with the goal of improving liquidity of small cap securities

Details of the plan can be complicated.

Our goal is simply to know how it affects us and the strategies we trade. If you want more information I have two Blog articles you can read.

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Subscribing to QiT allows me to save money and time by not having to pay for a datafeed, a trading platform, etc, and not spend hours running the stock screens, managing the datafeed, managing the trade signals, etc. Instead, all I do with QiT is check the signals each evening ...

Great article! As I was reading it, I felt the crosshairs right on my forehead, having committed most of the sins you describe! I have long been a student of Larry Conners, his methods and research, I definitely believe in the system, but have often let my “trader” persona take ...

I love your service and will going live very soon. Only third day on trial here.

Eric

Jane, just made all-time equity highs in my IRA thanks to Quantitrader, way to go!

Roger

My background with Connors and Amibroker gave me greater appreciation for all the work you have put into getting the trading results that attracted me to QiT. I thank you for your efforts and look forward to continuing.

Let me share with you two different perpectives of the QT system of algo trading.In 1978, I joined a large Wall Street firm as a retail broker. In the following 13 years as a broker and as a Principal, I saw several things that kept most brokerage clients from making ...

Trader Janie, your system looks terrific and thanks for posting all the histories in so much detail - most systems don't do that.

Bob

I simply wanted to thank you for adding the Conservative play into QiT. I also appreciate adding the layer of clarity by identifying what each level means on the Signal sheet. Keep up the great work to continue improving QiT.

Don

Thanks for the new ETF Portfolio. I find it meets my trading style, and I can go short inside my IRA.

Your services pay for themselves. I have belonged to many trading services and trading rooms and I find you and your services to be the most honorable and compassionate to the little guy.Keep up the good work,

Today has been an awesome day across the board for me. I am at a new equity high on L2-RP, no losses on L3 ETF (to be honest only a handful of trades so far) and close to break even on L3 Ultra. I started trading the ultra signals ...

Shari

I, for one, sincerely appreciate all your efforts and the QiT system itself, and I'm looking forward to really seeing how it will work for me.

Mark

Good work. I am really very excited about the results so far.

Mary

Trader Janie, I want to tell you how much that I am coming to admire you Your willingness to listen to our concerns and your new and repeated explanations to our concerns as well as your attempts at tweaking what you have already spent so much of your life ...

Keith

Hi Jane,I just wanted to let you know I really appreciate the trade detail you post on the website. I like seeing the trade history of the past 30 days showing the entry and exit price. I compare this to my exit price just to make sure we are tracking ...

I know that drawdowns are inevitable. In the past, this made me lose money by hopping from system A to system B to system C etc. Losing and losing and losing. Always leaving right before the winning periods got in :-) That is why I like Quantitrader. I will stay ...

What a great short signal on VRX (Ultra). Entered at 38 dollar. 11% profit so far

I joined this service because I love the process of Quant trading, removes all of the emotions. Many days I when I was traveling, I couldn't even tell you where the markets closed, but just entered my signals per the system and watched my account grow.

Marge

It took me only 5 minutes to put my trades onto IB tonight Thanks Jane- so easy and quick. You have lots of TIME putting on the trades. There is no stress and no decisions you have to make!! Easy Peesy!!